Binimoy and Bangla QR Code to drive cashless revolution for small traders

Amidst the rising popularity of digital transactions in the country, the Bangladesh Bank is taking significant policy measures to streamline transactions and promote digital inclusion among small traders.

Recently, the central bank introduced two services called "Binimoy" and "Bangla QR Code". The services are now in the pilot phase. Upon full implementation, these services are expected to bring about 70% of the country's population into the cashless network.

Since its launch in 2011, Mobile Financial Services (MFS) have gained immense popularity in Bangladesh. However, one of the major hurdles faced by users is the inconvenience of transactions between different MFS providers, necessitating the opening of multiple mobile banking accounts at the customer level.

Thankfully, after a prolonged period, this obstacle has been significantly eased. The central bank's app, Binimoy, now enables seamless transactions across various MFS platforms. Customers can conveniently transfer funds from their MFS accounts to any bank account and vice versa.

Furthermore, the introduction of Bangla QR Code by the central bank on 18 January this year has proven to be beneficial for small traders. Starting from street food vendors to cobblers, everyone can now accept cashless payments.

While the Bangla QR Code service has been initiated in the capital's Motijheel area involving 1,200 small merchants, it has also been launched in some other districts including Gazipur. Nevertheless, it is currently in the pilot phase.

To use the Bangla QR Code service, customers only need to have a single banking app installed on their mobile devices. Regardless of the bank they use, customers can make payments for products by scanning the Bangla QR Code within the app. Additionally, they can also use mobile financial service apps such as bKash, mCash, and Rocket to pay for their purchases.

Notably, this QR code system has garnered positive feedback from merchants like Mohammad Shahid, a guava seller in Motijheel, who expressed his satisfaction with the new system, which has particularly eliminated the hassle of dealing with change and ensured transparent transactions.

Moreover, the cashless payment system has also benefited individuals like cobbler Shapla, who acknowledged its convenience and the elimination of the need for cash transactions.

How Binimoy works

Let's delve into how the "Binimoy" platform operates. To use this inter-transaction platform through mobile banking services or banks, users must register a Binimoy account by providing relevant information.

Once registered, the "Binimoy" option becomes accessible through MFS apps, internet banking accounts, bKash, Rocket, and mCash payment services, and bank accounts. This option allows users to transfer money seamlessly between different accounts without the need to withdraw cash from an agent point.

To use Binimoy, an account must be registered. However, the transaction limit for each mobile banking service will determine the amount of money that can be transferred daily. For example, a bKash or Rocket number can send a maximum of Tk25,000 per day, with a limit of five transactions. The same restrictions apply when sending money using the Binimoy platform. Users may need to update their mobile banking service apps after registration.

According to the Bangladesh Bank circular, sending money from an MFS to another MFS such as bKash to Rocket through the Binimoy platform incurs a fee of Tk5 per Tk1,000. Sending money from mobile banking to a bank account will cost Tk10 per Tk1,000. Similarly, sending money from mobile banking to a payment service provider's e-wallet will incur a fee of Tk5 per Tk1,000. Additionally, the receiving institution will pay Tk0.5 to the Bangladesh Bank for each transaction, irrespective of the transaction amount, using the Binimoy.

Institutions engaged with Binimoy

The participation of banks, MFS providers, and Payment Service Providers (PSPs) in this service is not yet comprehensive.

Currently, transactions are being initiated between 11 institutions, including eight banks and three MFS providers. The participating banks are Sonali Bank, Brac Bank, UCB, Eastern Bank, Mutual Trust Bank, Pubali Bank, Al-Arafah Islami Bank, and Midland Bank. The MFS institutions involved are bKash, Rocket, and mCash. Additionally, a payment service provider called Tally Pay will be added to the service.

Majbaul Haque, the executive director and spokesperson of the central bank, stated that the central bank's plan is to gradually include all 61 banks, 13 MFS providers, and payment gateways with the service.

He further explained, "Our long-term plan to provide inter-institution transaction facilities to our institutions has just been implemented. Once all institutions upgrade their technology, our campaign for Binimoy will be fully operational. We anticipate an average daily trade volume of around Tk2,000 crore."

Currently, the average monthly transaction volume through MFS stands at about Tk1 lakh crore, which amounts to over Tk3,000 crore per day. Additionally, approximately Tk1,000 crore is transacted daily through internet banking. If customers fully comprehend the benefits of the Binimoy service, the transaction volume has the potential to increase exponentially.